Milwaukee County & City Budgets Face Financial Obstacles

Oct 16, 2017

The legislative bodies for the City of Milwaukee and Milwaukee County are taking up budget proposals made by their chief executives. And while both proposed budgets deal with a structural imbalance, they take it on in different ways.

The Milwaukee-based Public Policy Forum each year analyzes the financial plan from both the city and the county. Forum president Rob Henken says this year is a watershed moment for the city budget for a couple of reasons. 

"The annual budget gap caused by the structural imbalance is bigger heading into 2018, and the primary reason is that the city's pension fund contribution needs to go up by a whopping $22 million," he explains. 

And unlike previous years, the 2018 budget may impact all city departments more equally. In previous budgets, public safety (the Milwaukee Police Department and Fire Department) were largely spared from cuts that affected most other city departments. 

"This is the year that [Mayor Barrett] feels that that has to change, and that police and fire need to be treated roughly equivalent to other city departments and need to share the pain."

Henken says, "This is the year that [Mayor Barrett] feels that that has to change, and that police and fire need to be treated roughly equivalent to other city departments and need to share the pain." 

The city and county also face an issue that is somewhat unusual when compared to other states: Wisconsin law makes it impossible for them to increase the sales tax or income tax. 

"The only choices are property taxes and fees, so that continues to be a problem for the city and continues to mean that really, you have to look at service reductions," Henken explains. 

That leaves the city heavily reliant on property taxes, which disproportionately impacts those living in the city - despite the fact that many suburbanites and non-residents use city services on a daily or weekly basis. 

"There is a sizeable property tax levy increase in this budget - $9.7 million, which is about 3.7%."

"There is a sizeable property tax levy increase in this budget - $9.7 million, which is about 3.7%. And in fact, this is the first year since the inception of the shared revenue program the property tax revenue now exceeds intergovernmental revenue in the city budget," says Henken.

The Milwaukee County budget is facing a similar shortfall, with similar options. But the 2018 budget proposed by County Executive Chris Abele is unusual compared to his previous proposals. 

"We don't see the widespread service cuts or outsourcing, privatization options or service sharing initiatives that have marked several previous budgets from this county executive."

"We don't see the widespread service cuts or outsourcing, privatization options or service sharing initiatives that have marked several previous budgets from this county executive," Henken explains.

He continues, "[Abele] has essentially come out and said that service reductions, requiring employees to pay much, much more for their health care - tactics like that are no longer palatable. He would prefer to go to the revenue side as the least bad of the series of bad options that he has before him."